Tuesday, 8 July 2014

EDF in line for £800m windfall from subsidy scheme to keep lights on http://www.energy-broker.co.uk/edf-in-line-for-800m-windfall-from-subsidy-scheme-to-keep-lights-on/

EDF, which operates most of Britain’s nuclear power stations, could be in line for an £800m windfall via a loophole in a government subsidy scheme aimed at keeping the lights on at times of peak demand.Ed Davey, the energy and climate change secretary, last week outlined his plan to pay power plants to be on standby from 2018 in an effort to deal with peak demand and the intermittency of wind power.Most industry experts assumed that the “capacity market” scheme – the cost of which will be passed to the consumer – was designed to ensure that the many gas-fired power stations threatened with closure would be kept open.But the Department of Energy and Climate Change Decc now admits the scheme will be open to all forms of generation including nuclear, which has low operating costs and therefore could undercut its competitors in the auction to be run by the National Grid.The market is meant to start with that auction later this year although the ratings agency Moody’s has warned it may be delayed if it is found to breach European commission rules on state aid.All but one of the UK’s nuclear power plants are owned by the largely French state-owned EDF, whose UK atomic portfolio includes seven ageing plants due to be closed by 2024.